Telenor told the Indian government it will seek compensation if the issue of its 22 cancelled licences is not resolved promptly. Local press reports claim that Telenor is looking for $14 billion (€10.5 billion) in damages, although Telenor said it has not stated a specific amount of compensation.
This move comes after the Indian government gave notice to a number of mobile operators that they would lose their permits in early June, according to Reuters. The country's Supreme Court ruled in February that all 122 licences awarded in the 2008 auction would be revoked following accusations of "irregularities" in the way the 2G licences were awarded. The court said the process to allocate the licenses in 2008 was "arbitrary and unconstitutional."
Telenor spokesman Glenn Mandelid told Reuters that the company had not stated a specific compensation amount in its letter to the New Delhi-based government, but planned to seek compensation for "all investment, guarantees and damages."
Telenor moved into India by investing $1.2 billion in acquiring a 67 per cent holding in Unitech Wireless from local real-estate developer Unitech, after the Indian company purchased the operating licences. Telenor's total investment in its joint venture with Unitech, which operates under the Uninor brand, is now thought to have risen to around $2.7 billion.
Given its surprise at the loss of its operation permits, Telenor has accused Unitech of "fraud and misrepresentation" after the licence cancellation order and has said it would look to find a new business partner for its mobile business in India. Commenting on this threat of seeking compensation, Nordea analyst Stefan Gauffin told Dow Jones Newswires that Telenor's intention to seek damages is a way to put pressure on the government to carry through a swift rerun of the licence auction.
For more:
- see this Reuters article
- see this Dow Jones Newswire article
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